Jack Henry shares tumble after fiscal 3Q profit misses

The stock sank $3.90, or 14.8 percent, to $22.49.

Wachovia Capital Markets analyst Daniel Perlin said the stock's fair value is in the $24 to $25 range, but kept a "Market Perform" rating due to "the additional uncertainty surrounding the transition in revenue and economic backdrop."

Yet overall, the Monett, Mo., company has a "stable and predictable" business model and solid customer base, he said.

"We believe the company is well run by conservative and prudent management, and should prove to generate stable long-term returns for investors," Perlin said in a note to clients.

D.A. Davidson analyst John Kraft kept a "Buy" rating after the results, echoing confidence in Jack Henry's long-term viability, but cut his price target to $28 from $30.

The new target implies he expects the stock to rise about 6 percent over Tuesday's $26.39 close.

Due in part to the fiscal third-quarter miss, Kraft cut his 2008 estimates to profit of $1.20 per share on revenue of $750 million compared with a previous estimate of $1.29 per share profit on revenue of $758 million.

Analysts polled by Thomson Financial expect, on average, earnings of $1.28 per share for the period.

"Despite seeing license softness this quarter, Jack Henry continues to be the industry leader in organic growth and customer service reputation," Kraft said.